Hungary ready to discuss standby deal with IMF

Fellegi's statements, especially that a standby deal was in the cards instead of just a basic safety credit line, pointed to a softening in the government's position that it was looking for a deal without forfeiting its independence on economic policy.

"Fellegi's words ... seem to have calmed sentiments somewhat," said analyst Gabor Ambrus at London's 4Cast, but added it was probably "just a minor respite."

Fellegi said Hungary would be willing to discuss all the issues - such as new laws seen curtailing the independence of the central bank - that have sparked strong criticism from the IMF and the EU.

"We are ready for unconditional talks," Fellegi said. "Any contested issue ... can be solved at the negotiating table."

Preliminary talks with the EU and the IMF last month in Budapest ended prematurely because of the lenders' concerns about new laws seen as limiting the central bank's independence. The independence of central banks is a clear tenet in the EU treaty.

"(This is) not just a concern for the Commission," said EU spokesman Olivier Bailly. "It's a concern for the IMF and the European Central Bank ... it's also a concern for the markets."

He said Hungarian authorities need "to decide how they want to reassure the international partners and the markets about ... the legal environment in Hungary."

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Gabrielle Steinhauser and Don Melvin in Brussels contributed to this report.